Premier-designate eying one major reform every month till May

(By Paul Virgo)
(ANSA) - Rome, February 17 - Democratic Party (PD) leader
Matteo Renzi set ambitious reform targets on Monday after being
given a mandate to try to form a government from Italian
President Giorgio Napolitano.

Renzi, 39, is set to become Italy's youngest-ever premier
after torpedoing the coalition administration of his PD
colleague Enrico Letta last week over his lack of progress with
much-needed institutional reforms and measures to revive the
troubled economy.

Italy is slowly emerging from its longest postwar
recession, but it is still ravaged by unemployment of over 12%
with over four in 10 under-25s out of work.
Constitutional changes are also needed to streamline
government and reduce the cost of the country's expensive,
slow-moving political system.

The premier-designate said his government would seek to
achieve one major reform every month until May, starting this
month with a new election law to replace the dysfunctional old
system that was declared unconstitutional in December.
An election-reform bill Renzi negotiated with ex-premier
and centre-right leader Silvio Berlusconi is scheduled to go
before the House Tuesday.
"This will be followed immediately afterward by labour
reforms in March, public-administration reforms in April and
fiscal (reforms) in May," Renzi said.
Renzi said it would take him "a few days" to get a new
government ready, with talks with other parties on a programme
and a cabinet set to start Tuesday.

If the negotiations are successful, Renzi and his ministers
will be sworn in and the new government will face confidence
votes in both houses of parliament.

The problem is that the PD did not win a majority in the
Senate in last year's inconclusive general election, which means
Renzi is probably going to have to work with the same fractious
alliance Letta struggled with.

He will need the support of several small centrist parties
and the New Centre Right (NCD) of Deputy Premier and Interior
Minister Angelino Alfano, with the anti-establishment 5-Star
Movement (M5S) and Berlusconi's centre-right Forza Italia set to
stay in the opposition.

Alfano has warned that Renzi's government will never come
to life unless the NCD's demands are met.

And ratings agency Fitch said Monday that it was keeping a
negative outlook for Italy with a BBB+ rating, as Renzi "will
probably have the same problems as his predecessor" in pushing
through reforms.
Fitch said Letta's resignation as premier highlighted the
"volatility of Italian politics", pointing out that Renzi was
set to be the country's fourth premier since November 2011.

He is also set to become Italy's third-straight non-elected
premier, after Mario Monti and Letta.
But if Fitch has it doubts about a Renzi administration,
former British prime minister Tony Blair is optimistic.

"The challenges are absolutely formidable, but Matteo is
dynamic, creative and strong enough to make it. He has the right
combination of realism and idealism for the times we are living
in," said the Labour Party politician.
Renzi has often been compared to the charismatic young
Blair who achieved a Labour landslide after years of
Conservative dominance and plotted a 'Third Way' that combined
post-Thatherite economic policies with leftwing social ones.

The money markets have responded well to Renzi too.

The yield on 10-year Italian bonds fell to 3.61% on Monday,
its lowest since January 24, 2006, while the spread between
10-year Italian paper and the ultra-safe German bund narrowed to
193 points.
On Friday, the Milan bourse rose to its highest level
since July 2011 on the prospect of the business-friendly mayor
of Florence taking over the national government. On Monday
trading was virtually static.

European Economic and Monetary Affairs Commissioner Olli
Rehn, meanwhile, expressed confidence that Italy under Letta
would continue to respect EU budget pledges, including keeping
the deficit-to-GDP ration within 3%.

Renzi and the PD got a boost from Sardinia, where the
"fratricide" of Letta did not prevent centre-left candidate
Francesco Pigliaru winning regional elections there.